The United States District Court for the District of Montana ruled that two class action lawsuits brought against Boyne USA, Inc. are “related claims” under their insurance policy, and thus subject to a single liability limit of $5 million. The case is Boyne USA, Inc. v. Fed. Ins. Co., 2025 U.S. Dist. LEXIS 164762 (D. Mont. 2025).
The Class Action Lawsuits
On December 30, 2021, a class action lawsuit was brought against Boyne by owners of residential units at several condominium-hotels developed by Boyne in Montana. The plaintiffs alleged that Boyne required unit owners to enter restrictive rental management agreements that gave Boyne exclusive control over the rental of units, allowing Boyne to collect extra revenue from unit owners and impose unreasonable costs. The complaint included claims of breach of fiduciary duty, constructive fraud, breach of contract, breach of the implied covenant of good faith, and unfair trade practices.
On December 3, 2024, a separate class action lawsuit was brought against Boyne in Michigan. The lawsuit was brought on behalf of owners of realty in three Michigan resorts developed by Boyne. The lawsuit alleged similar claims to those in the Montana lawsuit, claiming that the owners were required to sign a rental management agreement that was non-negotiable and could be unilaterally changed by Boyne. The complaint included claims of constructive fraud, breach of contract, unjust enrichment, abuse of monopoly power, and sale of unregistered securities under federal law.
The Insurance Contract
When the Montana lawsuit was filed, Boyne was insured with Federal Insurance Company under a claims-made policy that included a Directors & Officers and Entity Liability Coverage part with a limit of $5 million. The policy period was from November 15, 2021, to November 15, 2022. When the Michigan lawsuit was filed, Boyne was insured with a renewal policy with the same insurer and with the same limits.
“Related Claims”
The policies had identical “Related Claims” sections that stated, “(A) All Related Claims shall be deemed a single Claim made in the Policy Year in which the earliest of such Related Claims was first made or first deemed to have been made in accordance with the Reporting section of the applicable Liability Coverage Part (the "Earliest Related Claim"). (B) All Related Claims shall be subject to the same Retention and Limits of Liability applicable to the Earliest Related Claim.”
“Related Claims” is defined in the policies as: “all Claims for Wrongful Acts based upon, arising from, or in consequence of the same or related facts, circumstances, situations, transactions or events or the same or related series of facts, circumstances, situations, transactions or events.”
Boyne contends that the two class action lawsuits are not Related Claims as defined in the insurance contract, as they involve different time periods, locations, plaintiffs, management agreements, and HOA agreements. Federal contends that the lawsuits are related claims because they are both based on Boyne’s rental management program.
How the Court Ruled
In determining the matter, the court looked to precedents set by previous cases. To decide whether the lawsuits were related, the Court compared the allegations in the Montana lawsuit and the Michigan lawsuit. Further, claims can be related even if the lawsuits are “filed by two different sets of plaintiffs in two different fora under two different legal theories,” as long as the common basis for those suits is the same.
The court determined that the two class action lawsuits are “related claims,” as defined by the policy, because they are based on the same general business practice and course of conduct. Boyne’s mandatory rental management program is the basis of both lawsuits. In fact, the lawsuits are nearly identical in some instances–they both claim, “Boyne has used its position as the developer of the [properties] to grant itself an improper degree of control of the [properties]. Boyne used that control to improperly extract profits that justifiably belong to Plaintiffs and class members while simultaneously imposing unreasonable costs on Plaintiffs and class members.”
While the court recognizes that there were differences in the lawsuits, such as those pointed out by Boyne, like different time periods, locations, plaintiffs, master deeds, and management agreements, those differences were not enough to determine that the suits were unrelated. The court ruled that the Montana lawsuit and the Michigan lawsuit were “related claims.”
Editor’s Note: Since the underlying lawsuits were determined to be “Related Claims”, they were deemed a single claim under the insurance policies, and Boyne can only recover up to the $5 million limit found in the policy applicable to when the first claim was made. If the claims were deemed unrelated, Boyne could have recovered up to the limit under both policies for a total of $10 million, less a $100,000 retention for each claim. Since they are related claims, Boyne is liable for any amount past the $5 million limit.